Bitcoin mining companies generated their highest monthly revenue ever in March, raking in more than $2 billion in block rewards and transaction fees.

This breaks the previous record of $1.74 billion from May 2021.

Of the $2 billion earned last month, about $85 million came from transaction fees, while $1.93 billion came from the block grant. (Miners receive compensation for both validating transactions and minting new bitcoins.)

The block grant, which is paid out for each block mined, is currently 6.25 bitcoins. But it will drop to 3,125 bitcoins after the upcoming halving in April. This will halve miners’ income from the creation of new bitcoins unless there is a significant price increase.

Higher network activity and rising bitcoin prices both contributed to miners’ bumper earnings in March. The upcoming halving has created an urgency for miners to maximize their profits before profits come under pressure.

The largest US mining pool, Foundry, captured 29.4% of all blocks mined in March. The Chinese pool AntPool took second place with 22.4% blocks. The two captured more than half of the monthly Bitcoin supply.

While miners enjoyed their profit bonus last month, exchange-traded funds that bought bitcoins on the open market piled up even further. ETFs bought about 66,000 bitcoins in March, while miners produced only about 25,500.

This increasing imbalance between supply and demand and the scarcity associated with the halving could lead to greater competition to secure Bitcoin. The resulting difficulty could lead to less efficient miners being priced out, driving industry consolidation.

With rewards halved within weeks, miners face an increasingly difficult environment if Bitcoin’s price fails to offset the drop in issuance. But if history repeats itself, a strong Bitcoin bull run could still be in store, mitigating the revenue hit from reduced block subsidies.

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